January 23, 2025
Top 10 Stock Alcon Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Alcon – Top 10 Stock in Swiss Market Index SMI
Alcon is listed as a top 10 stock on January 23, 2025 in the market index SMI because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 60 (high 60% performer), Obermatt assesses an overall buy recommendation for Alcon on January 23, 2025.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Alcon Buy
| 360 METRICS | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 60 |
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ANALYSIS: With an Obermatt 360° View of 60 (better than 60% compared with alternatives), overall professional sentiment and financial characteristics for the stock Alcon are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Alcon. The consolidated Sentiment Rank has a good rank of 92, which means that professional investors are more optimistic about the stock than for 92% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 53 or better than 53% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 30, meaning that the share price of Alcon is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 46. ...read more
RECOMMENDATION: With a consolidated 360° View of 60, Alcon is better positioned than 60% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 92) and safe financing practices (Safety Rank of 53), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Alcoṇ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Alcon very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2025, overall professional sentiment and engagement for the stock Alcon is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Alcon. Analyst Opinions are at a rank of 71 (better than 71% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 83 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 83% of competitors). But Analyst Opinions Change has a below-average rank of 33, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Alcon. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Alcon has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Alcon Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), Alcon shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Alcon. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 65, which means that the stock price is lower compared with invested capital than for 65% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 13 which means the stock price compared with what market professionals expect for future profits is higher than 87% of comparable companies, indicating a low value concerning Alcon's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 65 and for the dividend yields rank which is lower than for 70% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 30, is a hold recommendation based on Alcon's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Alcon, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Alcon Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Alcon shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Alcon. Profit Growth has a rank of 55, which means that currently professionals expect the company to grow its profits more than 55% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 76 (above 76% of alternative investments). But Sales Growth has a below the median rank of 35, which means that, currently, professionals expect the company to grow less than 65% of its competitors, and Capital Growth also has a lower rank of 25. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Alcon. ...read more
Safety Strategy: Alcon Debt Financing Safety above-average
| SAFETY METRICS | January 23, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 71 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Alcon has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Alcon is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Alcon and the other two below average. Leverage is at a rank of 71 meaning the company has a below-average debt-to-equity ratio. It has less debt than 71% of its competitors.Refinancing is at a rank of 34, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 66% of its competitors. Liquidity is at a rank of 44, meaning that the company generates less profit to service its debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Alcon has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Alcon are on the safer side. ...read more
Combined financial peformance: Alcon Lowest Financial Performance
| COMBINED PERFORMANCE | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| COMBINED | ||||||||
| COMBINED | 19 |
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ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Alcon (Health Care Supplies, Switzerland) shares have lower financial characteristics compared with similar stocks. Shares of Alcon are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives) and show below-average growth (Growth Rank of 46) but are safely financed (Safety Rank of 53), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Alcon's financial characteristics. As the company Alcon's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 30) and low growth (Obermatt Growth Rank of 46), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 53) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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